Don't punish private companies, lawyer tells MED

Pip England

Proposals to make large private companies file financial statements as if they were publicly traded should be killed off immediately, says law firm Chapman Tripp.

"They made cutting room floors for ideas like these," said CT partner Pip England. "To require an entity that which does not seek to raise money from the general public to make its financial reports publicly available is an unwarranted intrusion of privacy and commerciality confidentiality, will impose unnecessary compliance costs and will create a disincentive to invest in New Zealand."

A similar proposal, raised in 2005, had been rejected by the then Labour-led Government.

While the MED proposal would make New Zealand consistent with Australian reporting requirements, and would include grandfathering for existing businesses which would otherwise have to make disclosures, this "does not even begin to address the principled question of whether the proposal has any intrinsic merit", England said.

The MED proposal suggests there would be "broad societal benefits" in requiring listed company-style public financial reporting from companies with total assets of at least $10 million, consolidated revenues of more than $20 million and/or at least 50 full time employees because of the economic and social reverberations if they were to collapse.

- BUSINESSWIRE